September 23, 2022 11:35 AM

Amazon set to face Antitrust charges in European Union

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Nearly two years in the making, the case is one of the most aggressive attempts by a government to crimp the power of the e-commerce giant, which has primarily sidestepped regulation throughout its 26-year history.

LONDON — European Union officials are preparing to bring antitrust  charges against Amazon for abusing its dominance in internet commerce to box  out smaller rivals, according to people with knowledge of the case.

Nearly two years in the making, the case is one of the most aggressive  attempts by a government to crimp the power of the e-commerce giant, which  has largely sidestepped regulation throughout its 26-year history.

The European Union regulators, who already have a reputation as the  world’s most aggressive watchdogs of the technology industry, have determined  that Amazon is stifling competition by unfairly using data collected from  third-party merchants to boost its own product offerings, said the people,  who spoke on the condition of anonymity because the deliberations were  private.

The case against Amazon is part of a broader attempt in the United  States and Europe to probe the business practices of the world’s largest  technology companies, as authorities on both sides of the Atlantic see what  they believe is a worrying concentration of power in the digital economy.

Margarethe Vestager, the European Commissioner who leads antitrust  enforcement and digital policy, is also examining practices by Apple and  Facebook. In Washington, the Justice Department, Federal Trade Commission and  Congress are targeting Amazon, Apple, Facebook and Google.

William Kovacic, a law professor at George Washington University, said  the tech industry was facing a “striking critical mass” of attention from  governments around the world, including Australia, Brazil and India. He said  that regulators in Brussels and Washington may deploy so-called interim  measures against the companies, a rarely used tool that could force Amazon  and other large tech platforms to halt certain practices while a case is  litigated.

“This is a groundswell,” Mr. Kovacic said.

An announcement by European regulators about Amazon could come this  summer, although the timing is still in flux, one of the people said. The  Wall Street Journal first reported the expected charges.

The European Commission’s antitrust office, which started  investigating Amazon in 2018, is planning to release what is known as a  statement of objections against the company outlining its conclusions about  how it has violated antitrust laws. It is just one step in what could be a  yearslong process before final decisions are made about whether to impose a  fine or other penalties on the company. A settlement could also be reached.

Amazon declined to comment, as did the European Commission.

The case stems from Amazon’s treatment of third-party merchants who  rely on its website to reach customers. Investigators have focused on  Amazon’s dual role as both the owner of its online store and a seller of  goods that compete with other sellers, creating a conflict of interest.

Authorities in Europe have concluded that Amazon abuses its position  to give its own products preferential treatment. European officials have  spent the past year interviewing merchants and others who depend on Amazon to  better understand how it collects data to use to its advantage, including  agreements that require them to share certain data with Amazon as a condition  of selling goods on the platform.

Many merchants have complained that if they have a product that is  selling well on Amazon, the company will then introduce its own product at a  lower price, or give it more prominent placement on the website.

Bill Baer, the former head of antitrust enforcement in the U.S.  Justice Department, said a challenge for regulators will be proving harm to  consumers and rivals.

“It is not their success that justifies government intervention,” said  Mr. Baer, now a visiting fellow at the Brookings Institution. “It is when  that success is used in a way that unfairly limits competition.”

This month, Ms. Vestager signaled more action against American tech  giants, including giving her office added antitrust powers to address  structural competition problems within an industry rather than just  individual cases against a single company.

The European Commission, the executive body for the European Union, is  also debating a new digital services law that would include new regulations  for large tech platforms like Amazon, Facebook and Apple that play a  “gatekeeper role.” Other proposals under consideration include allowing  regulators to step in even before a large tech platform has established  dominance in a new market.

It is not the first time the European Commission has targeted Amazon.  In 2017, officials ordered Luxembourg to recover roughly 250 million euros  from Amazon in unpaid taxes. That same year, the company settled an antitrust  case concerning its contracts with book publishers for e-books.


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